Airway epithelial cells express receptors for pro-inflammatory cytokines such as tumor necrosis factor-alpha (TNF-alpha) and interleukin-1 (IL-1), and therefore represent target cells for autocrine or paracrine acting cytokines. Airway epithelial cells may modulate cytokine-mediated events by shedding cell surface receptors or by the production of receptor antagonists. Airway epithelial cells express the 55 kDa type I TNF receptor, which can be proteolytically cleaved to function as a soluble TNF binding protein. We have reported that protein kinase C activation by phorbol ester or IL-1b can induce shedding of the 55 kDa type I TNF receptor from human airway epithelial cells (HAEC), which is associated with decreased total cellular 55 kDa type I TNF receptor numbers. Conversely, corticosteroids inhibit TNF receptor shedding and increase total cellular 55 kDa type I TNF receptor numbers. Studies are under way to investigate the mechanisms underlying TNF receptor shedding and identify the enzyme responsible for proteolytic cleavage. HAEC also express the type I intracellular isoform of the IL-1 receptor antagonist (icIL-1Ra type I). We have reported that corticosteroids induce icIL-1Ra type I mRNA and protein as a mechanism by which IL-1-mediated airway inflammatory events might be attenuated. Another manuscript has been completed describing the differential regulation of icIL-1Ra release from HAEC by corticosteroids and cytokines. IL-4, IL-13, and interferon-g induce icIL-IRa type I release to the extracellular compartment, while corticosteroids inhibit release, thereby allowing icIL-1Ra type I to accumulate within the intracellular compartment. Additional studies are in progress to investigate the mechanism underlying icIL-1Ra type I release and understand its role as a regulator of intracellular IL-11 bioactivity. An increased understanding of the mechanisms by which epithelial cells modulate responses to inflammatory cytokines may allow new therapeutic approaches to reduce airway inflammation to be developed.